Crew Energy Announces Strategic Transactions in Northeast

Crew Energy Announces Strategic Transactions in Northeast British
Columbia 
CALGARY, ALBERTA -- (Marketwire) -- 12/04/12 -- Crew Energy Inc.
("Crew" or the "Company") (TSX:CR) of Calgary, Alberta is pleased to
announce two transactions in the Company's British Columbia Montney
resource play area of operations. 
Through the combination of these two transactions, Crew will increase
its Montney land position from 130,748 net acres to over 150,000 net
acres. The Company is consolidating Montney lands within the
Septimus/Groundbirch corridor proximal to Company infrastructure and
reducing the Company's net debt position by approximately $86 million
subject to closing adjustments. 
Kobes Transaction 
Crew has executed a definitive agreement to sell, for $108 million
prior to closing adjustments, approximately 15,800 net acres of
liquids rich Montney land in the Kobes area with current production
of approximately 625 boe per day (29% liquids) and one cased
horizontal well awaiting completion which was expected to add
approximately 1,100 boe per day of production in January 2013. The
lands have proved developed producing reserves of 444 mboe, total
proved reserves of 3,541 mboe, and proved plus probable reserves of
11,862 mboe as assigned by GLJ Petroleum Consultants as at December
31, 2011. Future development capital of $112.3 million was attributed
to the proved plus probable reserve assignment. This transaction has
an effective date of December 1, 2012 and is expected to close by
December 28, 2012, subject to satisfaction of standard industry
closing conditions. 
Septimus/Groundbirch Transaction 
The second transaction involves assets that are contiguous to Crew's
Septimus area of operation and involves the purchase, for $22.0
million, of approximately 36,000 net acres of primarily liquids rich
Montney rights, current production of 52 boe per day, proved
developed producing reserves of 152 mboe, total proved reserves of
1,077 mboe and proved plus probable reserves of 3,280 mboe assigned
by GLJ Petroleum Consultants as at December 31, 2011. Future
development capital of $26.1 million was attributed to the proved
plus probable reserve assignment. Crew has retained an exclusive
option to purchase, by March 15, 2013, an additional 140 sections of
land, total proved reser
ves of 1,850 mboe and proved plus probable
reserves of 9,970 mboe, as assigned by GLJ Petroleum Consultants
effective December 31, 2011, for $56 million on the option lands.
Future development capital of $77 million was attributed to the
proved plus probable reserve assignment. The bulk of the reserves and
land in the option area are in the Altares and Attachie liquids rich
areas of the Montney play. This option, if exercised, is expected to
close by March 31, 2013. 
Transaction Rationale 
These transactions are consistent with Crew's strategy of building a
significant resource base at a reasonable cost while maintaining a
strong balance sheet. 


 
--  Crew's balance sheet is improved with an $86 million net reduction of
    debt to an estimated year-end total debt forecast of $294 million
    assuming completion of both transactions; 
    
--  Crew's northeast British Columbia Montney ownership has increased by 16%
    to over 150,000 net acres. A map of the acreage acquired in the
    Septimus/Groundbirch transaction will be posted on the Company's
    website; 
    
--  The Kobes lands were purchased by Crew for $3.4 million resulting in
    significant value creation from the Kobes transaction; 
    
--  A greater concentration of lands proximal to Company infrastructure at
    Septimus and west Septimus/Groundbirch will result in enhanced economies
    of scale and improved economics; 
    
--  Crew's infrastructure and lands are situated to take advantage of our
    current "flow east" economic solution or can be re-directed for a "flow
    west" solution; 
    
--  Of the 36,000 net acres acquired in the first phase of the
    Septimus/Groundbirch transaction, approximately 29,000 net acres are in
    the "wet gas" window, most of which are in a "sweet spot" with expected
    yields of 45 to 59 bbls per mmcf of liquids (17% to 32% condensate),
    5,700 net acres are within the Montney "oil" window and 1,300 net acres
    are located within the "dry gas" window; 
    
--  The upper Montney at west Septimus/Groundbirch has thicknesses of 450 to
    525 feet compared to Septimus at 260 to 450 feet with a total Montney
    thickness of approximately 800 feet. While no horizontal wells have been
    drilled on the lands to date, the results from tests on several vertical
    wells located on the lands and reservoir quality as determined from
    petrophysical analysis are similar to vertical tests in significant high
    deliverability horizontal Montney developments nearby; 
    
--  Crew has identified and will continue to pursue additional Montney
    consolidation opportunities; 
    
--  The addition of the prospective lands will require the expansion of the
    Aux Sable Canada, Crew operated Septimus gas plant. 

 
Cautionary Statements 
Forward-looking information and statements 
This news release contains certain forward-looking information and
statements within the meaning of applicable securities laws. The use
of any of the words "expect", "anticipate", "continue", "estimate",
"may", "will", "project", "should", "believe", "plans", "intends",
"forecast" and similar expressions are intended to identify
forward-looking information or statements. In particular, but without
limiting the foregoing, this news release contains forward-looking
information and statements pertaining to the following: completion of
the asset disposition and acquisition and the timing thereof;
projected debt levels including forecast 2012 year end net debt after
closing of the transactions; future development, exploration,
acquisition and development activities and related capital
expenditures and the timing thereof; the total future capital
associated with development of reserves and resources; and methods of
funding our capital program. 
Forward-looking statements or information are based on a number of
material factors, expectations or assumptions of Crew which have been
used to develop such statements and information but which may prove
to be incorrect. Although Crew believes that the expectations
reflected in such forward-looking statements or information are
reasonable, undue reliance should not be placed on forward-looking
statements because Crew can give no assurance that such expectations
will prove to be correct. In addition to other factors and
assumptions which may be identified herein, assumptions have been
made regarding, among other things: that all conditions to closing of
the transactions are satisfied or waived; the impact of increasing
competition; the general stability of the economic and political
environment in which Crew operates; the timely receipt of any
required regulatory approvals; the ability of Crew to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; drilling results; the ability of the operator of
the projects in which Crew has an interest in to operate the field in
a safe, efficient and effective manner; the ability of Crew to obtain
financing on acceptable terms; field production rates and decline
rates; the ability to replace and expand oil and natural gas reserves
through acquisition, development and exploration; the timing and cost
of pipeline, storage and facility construction and expansion and the
ability 
of Crew to secure adequate product transportation; future
commodity prices; currency, exchange and interest rates; regulatory
framework regarding royalties, taxes and environmental matters in the
jurisdictions in which Crew operates; the ability of Crew to
successfully market its oil and natural gas products. Included herein
is an estimate of Crew's year-end net debt based on assumptions as to
cash flow, capital spending in 2012 and the other assumptions
utilized in arriving at Crew's 2012 capital budget. To the extent
such estimate constitutes a financial outlook, it is included herein
to provide readers with an understanding of estimated capital
expenditures and the effect thereof on debt levels and readers are
cautioned that the information may not be appropriate for other
purposes. 
The forward-looking information and statements included in this news
release are not guarantees of future performance and should not be
unduly relied upon. Such information and statements, including the
assumptions made in respect thereof, involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to defer materially from those anticipated in such
forward-looking information or statements including, without
limitation: changes in commodity prices; changes in the demand for or
supply of Crew's products; unanticipated operating results or
production declines; changes in tax or environmental laws, royalty
rates or other regulatory matters; changes in development plans of
Crew or by third party operators of Crew's properties, increased debt
levels or debt service requirements; inaccurate estimation of Crew's
oil and gas reserve and resource volumes; limited, unfavourable or a
lack of access to capital markets; increased costs; a lack of
adequate insurance coverage; the impact of competitors; and certain
other risks detailed from time-to-time in Crew's public disclosure
documents (including, without limitation, those risks identified in
this news release and Crew's Annual Information Form). 
The forward-looking information and statements contained in this news
release speak only as of the date of this news release, and Crew does
not assume any obligation to publicly update or revise any of the
included forward-looking statements or information, whether as a
result of new information, future events or otherwise, except as may
be required by applicable securities laws. 
BOE equivalent 
Barrel of oil equivalents or BOEs may be misleading, particularly if
used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on
an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Given that the value ratio based on the current price of
crude oil as compared to natural gas is significantly different than
the energy equivalency of 6:1, utilizing a 6:1 conversion basis may
be misleading as an indication of value. 
Crew is an oil and gas exploration and production company whose
shares are traded on The Toronto Stock Exchange under the trading
symbol "CR".
Contacts:
Crew Energy Inc.
Dale Shwed
President and C.E.O.
(403) 231-8850
dale.shwed@crewenergy.com 
Crew Energy Inc.
John Leach
Senior Vice President and C.F.O.
(403) 231-8859
john.leach@crewenergy.com 
Crew Energy Inc.
Rob Morgan
Senior Vice President and C.O.O.
(403) 513-9628
rob.morgan@crewenergy.com
www.crewenergy.com
 
 
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